Entrepreneurs have high mortality rate: Alok Goyal

In the SME Conclave 2013, called by TiE (The Indus Entrepreneurs) and Indiamart.com, in Delhi, HCL Technologies’ Vice-Chairman, Vineet Nayar narrated his experiences of starting up and the importance of having a focus. Nayar linked the experience of starting up to a rafting experience where one knows the risks involved and should be prepared for the tumultuous journey.
Vineet Nayar, Vice Chairman, HCL Technologies during the keynote address at TiE SME Conclave 2013 in New Delhi on Friday, 26 July 2013 “Since the journey will be tough, it is important to have a mindset which is in tune with the risk. One should also have employees who want to work in a startup and are best fitted for the job,” Nayar said.

Dinesh Agarwal, Founder and CEO, Indiamart.com said SMEs continue to be the growth engine for the country even in tough economic conditions. “Large part of our growth even during a slowdown is coming from the SME sector,” he said.

Agarwal went on to add that organizations like his are aiming to bridge the gap for the SME sector and it is important that SMEs, especially in the traditional sector, keep pace with the issue and advances of the new economy.

The second session on Global Competitiveness saw Himangshu Vaid, MD, Instapower Ltd., talk about the hardships SMEs face in the country. “We hear a lot about what government is doing for SME. But in reality the left hand of the government has no idea what the right hand is doing. We pay high interest rates, pay highest rate on power, pay taxes like MAT and are expected to be globally competitive. This cannot happen in such a situation,” says Vaid. According to him greater support and help is needed from all quarters and mere lip service by the government would not be of any help.

While discussing on the need for funding for SMEs to scale up, Alok Goyal, Partner, Helion Advisors, said, “Since the mortality rate of entrepreneurs is very high, it’s very difficult to recognize which one of them has that million dollar idea.” Goyal said on an average, he has to meet more than 120 entrepreneurs to decide on which one of them he would invest his money. Ashustosh Garg, Chairman and MD of Guardian Lifecare, an eight-year-old health retail chain said, “the entrepreneur should always learn new skills to keep in pace with the changing business model. Else, the entrepreneur and the business will become redundant,” Garg said.

Talking from the investor’s point of view, Goyal advised promoters to compromise on their own salary. “Investors like when the entrepreneur doesn’t withdraw a huge salary,” he said. However, he also briskly mentioned the responsibilities of an investor, saying that “ an investor should never try to control the business himself. That’s a recipe for disaster.”